Diodes is committed to ensuring that we use responsibly-sourced minerals in both our supply chain as well as through our suppliers. The armed conflict and human rights atrocities that proliferate and are funded by the exploitation of natural resources in the Democratic Republic of Congo (DRC) and adjoining countries are unacceptable and any manufacture of product connected with this will not be tolerated.
The ores, commonly known as conflict minerals, are converted into the metals tantalum, tin, tungsten, and gold (3TG). Conflict minerals originating from the DRC and adjoining countries are not included in materials or products supplied to Diodes or its subsidiaries unless they originate from smelters or refiners listed as “conformant” on the Responsible Minerals Initiative (RMI) website. We are committed to ensuring an ethical and diverse supply chain that is focused on responsible mineral sourcing.
Diodes’ “Statement on Conflict Minerals” describes our approach and commitment to work towards a goal of sourcing only conflict-free materials in our products. We are committed to the sourcing of raw materials in a way that supports human rights, labor, health and safety, the environment, and ethics. Consistent with this commitment, we address the issues associated with the harvesting, extraction, and transportation of raw materials as a global responsibility applicable to all substances used in our products—unbounded by specific materials or locations.
With a strong commitment to manufacturing our products responsibly and sustainably, we align our business practices and operations with the Code of Conduct published by the Responsible Business Alliance (RBA), a leading industry coalition dedicated to corporate social responsibility in global supply chains. The RBA Code of Conduct establishes standards to ensure safe working conditions in the electronics industry, industries in which electronics is a key component, their supply chains, and that workers are treated with respect and dignity and that business operations are environmentally-responsible and ethically-conducted. The RBA Code of Conduct is based on international principles and norms that we support and incorporate in our business practices, including the United Nations (UN) Universal Declaration of Human Rights, the UN Guiding Principles on Business and Human Rights, and the International Labor Organization’s Declaration on Fundamental Principles and Rights at Work.
Through its rigorous RBA Validated Assessment Program (VAP), Diodes endeavors to ensure that its operational activities are consistently conducted in alignment with the RBA Code of Conduct and Diodes’ quality standards and procedures.
Last Updated: August 2020
On January 1, 2012, the California Transparency in Supply Chains Act of 2010 (“Act”) went into effect. The Act requires companies to disclose their efforts to eradicate slavery and human trafficking within their supply chains. Diodes Incorporated and its subsidiaries (collectively, the “Company”) have a long standing commitment to maintain a culture of compliance with applicable laws, rules and regulations, and high standards of ethics and business conduct with respect to slavery, human trafficking, and forced, involuntary, or child labor. The Company also expects our suppliers to conduct their businesses in a lawful and ethical manner, upholding high standards of integrity and ethics.
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Diodes Incorporated conducts business in accordance with our core values of integrity, commitment, and innovation. As a globally-traded business committed to protecting human rights, we take seriously the responsibility of preventing modern slavery in our business and supply chains. We are committed to upholding the best practices and remaining vigilant to continuously improve.
Diodes takes its social responsibilities very seriously and conducts its business in accordance with its core values of integrity, commitment and innovation.
Human Rights Documents
Sustainability is represented in our core values of integrity, commitment, and innovation. We strive for environmental sustainability, social responsibility, corporate citizenship, and responsible sourcing to have a long-term, positive impact on our stakeholders: communities, employees, suppliers, customers, and investors. These corporate responsibility expectations are incorporated into the business processes we use with our suppliers so as to maintain and improve supply chain accountability. With our strong commitment to operating our business in a sustainable and socially responsible manner, we expect our suppliers to join us in this commitment and conduct their businesses based on this shared set of values and principles.
Customers are one of our key stakeholders. With a customer-centric focus, we are committed to designing, manufacturing, supplying and supporting high-quality and high-reliability products. We adopt a robust quality management system that incorporates supplier quality control and supply chain security processes so that we can consistently source and deliver high quality products. Consistent with our Anti-Counterfeit Policy, supply chain integrity is of critical importance to us and our customers. We encourage customers to purchase directly from Diodes or our authorized distributors to ensure receipt of authentic Diodes products. This minimizes any safety or reliability risks associated with counterfeit or compromised semiconductors in the supply chain.
Diodes subscribes to the Code of Conduct published by the Responsible Business Alliance. While we do not have a specific or formalized labor rights certification program for our suppliers, we expect our suppliers to recognize and conduct their business in a manner consistent with the RBA Code of Conduct’s requirements. We communicate our sustainability expectations through our corporate social and environmental responsibility (CSER) Code of Supplier Conduct. The CSER Code of Supplier Conduct is modeled on the RBA Code of Conduct that defines labor, health and safety, environmental standards, business ethics standards, and a management system to assure continued compliance with this RBA Code of Conduct. The RBA is a leading industry coalition dedicated to corporate social responsibility in global supply chains. One of the most fundamental RBA programs is the Validated Assessment Program (VAP), which is the leading standard for onsite compliance verification and effective, shareable audits—which all rely on approved audit firms.
We have various principles and requirements outlined in our policies that we expect our suppliers to adhere to and conduct business consistent with, including:
We are committed to sourcing materials from suppliers who operate their supply chains in a socially-responsible manner. We award business to suppliers who commit and adhere to the applicable laws and regulations and whom act fairly and with integrity, compete in an ethical manner, provide a safe and healthy working environment, treat stakeholders with respect and dignity, and respect internationally proclaimed human rights.
Diodes' top ten suppliers represent a cross-section of major semiconductor foundry partners, subcontract IC assembly companies, and semiconductor packaging piece part providers. In 2020, they included (in alphabetical order): DB HiTek, Global Foundries, Greatek Electronics, Huahong Grace Semiconductor, Jiangsu Changjiang Electronics Technology, Key Foundry, Ningbo Kangqiang Electronics, Phenitec Semiconductor, Powerchip Semiconductor, and Vanguard International Semiconductor.
Those doing business with the Company are required to comply with the applicable law of the countries in which they do business. We generally reserve the right to require our direct suppliers to periodically acknowledge in writing their compliance with the applicable laws, regulations, and the Company’s Code of Supplier Conduct and related policies. The Company maintains the right to inspect suppliers to monitor their compliance with the applicable laws and adherence to the Company’s Code of Supplier Conduct and various supplier-related policies (including environmental management and compliance requirements). In the event that an inspection reveals a supplier’s non-compliance, we will address these issues on a case-by-case basis. We reserve the right to terminate our business relationship with any supplier who fails to comply with these requirements or resolve the non-compliance in a satisfactory time frame.
We adopt a flexible manufacturing strategy — including leveraging external assembly, test subcontractors, and wafer foundries to fulfill additional capacity needs beyond our installed base of owned capacity. We require these critical external sourcing suppliers to comply with our quality specifications. Our corporate supplier quality specifications encompass a wide range of topics such as quality controls, reliability, quality system requirements, change management, continuous improvement activities, conflict minerals, and data retention. As a key stakeholder in our supply chain, we engage frequently with these critical external sourcing suppliers throughout the year and we evaluate their performance through periodic quality scorecard assessments and business reviews.
As a multinational company with a global footprint, we engage with a wide range of suppliers and envision developing a diverse and inclusive global supply chain network. We believe diversity fuels innovation and allows suppliers to develop more innovative products and solutions that serve our business needs. We encourage engagement with diverse-owned businesses that offer high quality products and services, as well as competitive prices. Our commitment to support supplier diversity helps us attracts a wide range of qualified suppliers to support our business needs and optimize our entire value chain.
Diodes expects suppliers to implement a CSER Code of Supplier Conduct that is modeled on the Responsible Business Alliance (RBA), which defines labor, health and safety, environmental, business ethics standards, and a clear management system to assure continued compliance with this code. The RBA is the world's largest industry coalition dedicated to corporate social responsibility in global supply chains. One of the most fundamental RBA programs is the Validated Assessment Program (VAP), which is the leading standard for onsite compliance verification and effective, shareable audits—which all rely on approved audit firms.
Diodes also requires its suppliers to abide by our Code of Supplier Conduct, which calls for direct suppliers to comply, at a minimum, with the applicable labor and environmental laws and regulations of the countries in which products are grown, produced, and in which they have operations. This includes laws against human trafficking, compulsory prison labor, child labor, slave labor or physical abuse of workers, and to monitor their suppliers for compliance with the labor and environmental laws and regulations of the countries in which they have operations.
Semiconductor manufacturing processes are complex and require the use of an assortment of materials and chemicals during the wafer fabrication and product assembly operations. We are committed to selecting and handling these materials and chemicals (including hazardous substances, if any) in an environmentally and socially responsible manner so as to protect the environment, and our employees, customers, and communities. We regularly monitor the use of materials and chemicals required in our production manufacturing processes, and provide personal protective equipment (PPE) and implement safety protocols to ensure the safe handling of chemicals. Where possible, we identify and substitute environmentally preferred alternatives to the materials and chemicals used in our manufacturing to reduce the impact on our environment. We remain compliant with applicable legal and regulatory requirements and maintaining the quality and reliability of our products.
We enforce rigorous product compliance with the EU Directive regarding the Restriction of Hazardous Substances (RoHS) 2011/65/EU and the REACH Directive 2006/1907 on the Registration, Evaluation, Authorization and Restriction of Chemicals. We provide customers with information on the chemical composition of the materials used in our products as further described in our master Certificate of Compliance (master CofC).
Diodes is committed to conflict-free sourcing of tin, tantalum, tungsten, and gold—which are widely used in manufacturing in the semiconductor industry. These metals are derived from minerals that have a variety of sources around the world.
One potential source has historically been the Eastern region of the Democratic Republic of Congo (DRC). That region is currently the site of armed conflict, and mining profits by local military groups there are reportedly contributing to human rights abuses, environmental damage, and theft from DRC citizens.
We require our suppliers to undertake reasonable due diligence with their supply chains to ensure these metals are not being sourced from the DRC or adjoining countries, unless they are purchased from smelters or refiners listed as “conformant” on the Responsible Minerals Initiative (RMI) website. We have surveyed relevant suppliers of components and raw materials concerning the origins of these metals. The result of this survey, in the form of the RMI reporting template, can be found in our Conflict Minerals Report.
Our products are used in a wide variety of applications by our customers, and product longevity and continuity of supply are important procurement considerations. We adopt a flexible manufacturing strategy and multiple inventory management disciplines to meet our customers’ expectations of product longevity and supply continuity consistent with industry standards. We are committed to following a controlled, documented, and transparent business process should a product reach the end of its life cycle, and we will collaborate with our customers to help facilitate a seamless product transition in the event a product is discontinued.
When available, we seek to provide product life cycle information to our customers for their product design and planning purposes. We also make available product change notifications consistent with J-STD-046 for product/process changes and J-STD-048 for product discontinuance.
We continuously monitor the performance of our product development and manufacturing processes to help ensure high levels of quality and reliability of our products throughout their entire life cycle. As part of our well-defined issue resolution processes, containment processes have been specified and, if needed, may be initiated and will be executed in close cooperation with our customers. As such, Diodes has not initiated any product recalls due to concerns regarding the safety of our products over an extended period of at least five years.
Continuity and reliability of the supply of materials and chemicals used in our product manufacturing are critical to our longevity and continuity of supply commitments to our customers. To help mitigate any risks of supply shortages and the impact on our operations, we use multiple suppliers for critical materials and chemicals. We also monitor the applicable regulatory restrictions that may be applied to the importation and use of such materials and chemicals and that may otherwise impact their availability.
To ensure products are delivered to our customers in good condition and to protect the safety, quality, and reliability of our products, we use a wide variety of materials in the packing, packaging, handling, and shipping of our products. Packaging materials used include: handheld shrink wrap, bubble wrap, cardboard boxes, cardboard tubes, and plastic wafer boxes.
As part of our commitment to sustainability, we strive to use environmentally-friendly, recyclable materials where possible to reduce the environmental impact of our operations. We also aim to minimize the amount of packaging materials we use in our operations while protecting the condition of our products. Packaging reduction programs have been implemented to minimize the amount of waste produced from our operations. For example, where commercially feasible, we recycle and reuse packaging materials received in incoming goods in the packaging and shipping of products we deliver to our customers. In 2021, 100% of the handheld shrink wrap and bubble wrap materials used at our manufacturing sites were recyclable.
In addition to requiring our packaging material suppliers to comply with our environmental requirements and sustainability expectations, as part of our commitment to continuous improvement, we look for ways to identify, evaluate and select environmentally preferable packaging materials (for example, materials that contain recycled content) for use in our operations. We strive to maximize the recyclability and reusability of the packaging materials used, and consider sustainability in the design of our product packaging.
Diodes respects the intellectual property rights of third parties and also takes actions to establish, preserve, and enforce its intellectual property rights in order to stay competitive in the semiconductor market. In addition to patents, trade secrets, copyrights and other intellectual property rights owned by us, examples of our trademarks can be found here. Use of our trademarks require prior authorization from us and is subject to these guidelines.
We may obtain patents, trademarks, copyrights and other intellectual property rights from time to time to be used as part of our business. With approximately ~480 patents worldwide, innovation is an integral part of our core values. By providing patent incentive awards to our employees, we recognize their contribution to our intellectual capital and encourage innovation in all organizational levels and functions.
We may assert our intellectual property rights against infringers so as to protect our intellectual capital and IP investment, and to ensure our freedom of operation. As recommended by the SASB Code TC-SC-520a.1 regarding Intellectual Property (IP) protection and Competitive Behavior, we track the total amount of monetary losses as a result of legal proceedings associated with anti-competitive behavior regulations.
During the reporting years of 2019, 2020 and 2021 we were not involved in any legal proceeding associated with anti-competitive behavior regulations (e.g. price-fixing anti-trust behavior, patent misuse, or product bundling aimed to limit competition); therefore, we did not incur any monetary losses or liabilities associated with the enforcement of such anti-competitive behavior regulations.
We compete fairly and operate our business in compliance with the applicable anti-trust laws, and do not engage in anti-competitive behavior or monopoly practices. There have been no significant incidents of any non-compliance concerning product and service information, marketing or labelling regulations, or relating to bribery or corruption.
Last Updated: July 2020
Our semiconductor products can be used in a wide variety of applications, including systems that perform critical functions, such as those used in medical applications, transportation, communications systems, and critical infrastructure (e.g. power grids), where the failure of a component in the system could have severe consequences, may jeopardize the health, safety and security of the general public, or result in property damage and economic losses. Products purchased from unauthorized sources may present safety, reliability and performance risks as they may not have been properly handled or stored, or may be counterfeit products.
To mitigate the risks of counterfeit semiconductor products entering into the supply chain, we strongly recommend customers to purchase from our authorized distributors and our sales offices. Semiconductor products purchased through our authorized distributors and sales offices have our full support in accordance with the terms and conditions of sale. We do not provide authentication services or warranty coverage for, and do not accept returns of, products purchased from unauthorized sources.
Diodes supports the Semiconductor Industry Association’s (SIA) efforts in combating counterfeit semiconductor products (see https://www.semiconductors.org/wp-content/uploads/2018/01/SIA-Anti-Counterfeiting-Whitepaper.pdf). We work collaboratively with customs and border protection agencies in seizures of counterfeit semiconductor products, and with other law enforcement agencies to address counterfeit challenges.